Unlike other industries, the impact of Covid-19 pandemic has been extremely positive with industry leaders quickly getting together and embracing tech-led innovative best practices. At a time when nation was reeling under lockdown, it was an impeccable cold chain infrastructure that made it possible to ensure that the fruit & vegetables, pharma products and other perishable goods reach the last mile with the utmost freshness and integrity. When the country launched nation-wide roll-out of Covid-19 vaccination, it was a sound cold chain system that again came to the rescue. But what made the Indian cold chain network on a ready-to-roll stage in times of adversities? Well, it was a perfect confluence of all the stakeholders – cold chain operators, government machinery and technology solution providers – that made the IMPOSSIBLE POSSIBLE! Always considered as the laggard in terms of technology adoption, Indian cold chain segment proved to the world that small, yet meaningful changes can reap ‘transformative’ results and our successful vaccine program has been a proof of it covering the length & breadth of the country. While much more remains to be achieved, our Cover Story unravels immense hardships that companies faced and how they converted those challenges into opportunities in no time and sustained the test of times. Here’s an ode to these ‘Cold Change Makers’…
COVID-19 PANDEMIC IMPACT ON COLD CHAIN
Vickram Srivastava, Head of Planning – Global Supply Chain, Sun Pharma: Though the overall logistics sector (ambient and cool/cold chain) has been under stress in the last two years with unprecedented new challenges the sector has seen (availability-to-serviceabilityto-reliability-to-spiralling cost), the overall impact has been positive on the whole pharma logistics sector with the players rising to the occasion to ensure critical life-saving drugs were available to cater patient needs. With the launch of multiple vaccines over the last one year, the cold chain segment has seen further investments and developments along with latest technology adoption.
Rajeev Ranjan, Chief Operating Officer, McDonald’s India – North and East: Covid led lockdowns have disrupted the supply chain of low shelf life products, leading to a significant increase in the (substitutable) demand for frozen packaged food. The global supply chains have faced reliability challenges due to COVID induced labour shortages, shipping line delays and product availability. This has pushed intermediaries to create cold chain distribution infrastructure to support the growing demand. The agility in the supply chain needed to meet the needs of business in current VUCA environment has speedily driven cold chain integration to build real-time readiness to make stocks available to shelf/consumers swiftly.
Producers, farmers, manufacturers have seen the disruption of formal distribution structures. As a result, they have started investing in primary storage to realize the value of their proceed and to support temporary storage of chilled/ frozen products coming from retail due to covid led lockdowns. The need to trace food sources and create visibility during movement has become a critical part of the food value chain. This has necessitated technology to play a vital role in the adoption of cold chains. The implications of these changes are significant to the business and call for government/policymakers/regulating agencies to support businesses by reducing food wastes through sector-specific interventions.
Rahul Agarwal, Managing Director, KoolEx Cold Chain Ltd.: The COVID pandemic has resulted in challenges and opportunities. The cold chain segment is manpower intensive. In fleet operations, the driver is the key and the pandemic led to a lot of challenges on driver safety, driver availability and initial bottlenecks on free passage of trucks. Since the driver has to move across the country, he is the most impacted in term of risks. Hence his safety, monitoring & checking was the key. We took this challenge as an opportunity and continued 100% driver availability on our fleet, by taking care of driver safely and giving them Covid Cover and additional incentives. Many competitors were not able to achieve this, and this helped us add more volumes/ clients and better turnaround of our fleet. Additionally, being the market leaders for Covid Vaccine movement, we were able to further enhance our vehicle turnarounds, revenues, profits and enhance our brand value. The COVID-19 pandemic also led to the delay in construction of our upcoming cold chain facility in Khopoli and this is now expected to go live in January 2023.
Mihir Mohanta, General Manager (SCM), Mother Dairy: On the demand front, Covid-19 increased the demand of the frozen products particularly the snack foods. Since the restaurants, hotels & various food junctions were shut down, the home consumption of these products got a thrust. The market value of the Indian frozen foods, which was at Rs74 billion in 2018 increased to Rs105.6 billion in 2020. Until 2019, it was growing at 15%; in 2020, it had an unusual growth of 23%, which can be attributed to changing consumer behaviour during the pandemic. The criticality of the cold chain was strongly realized when the government wanted to reach out to the remote areas with Covid-19 vaccines. It did make a serious planning effort to make it happen. The cold supply chain, therefore, got appropriate attention, and got the requisite fund allocation for improvements.
On the food supply related cold chain development, the government is supporting the creation of infrastructure facilities along the entire supply chain viz. pre-cooling, weighing, sorting, grading, waxing facilities at farm level, multi-product/ multi-temperature cold storage, CA (Controlled Atmosphere) storage, packing facility, IQF (Individual Quick Freezing), blast freezing in the distribution hub and reefer vans, mobile cooling units for facilitating distribution of horticulture, organic produce, marine, dairy, meat, and poultry, etc. The scheme allows flexibility in project planning with special emphasis on the creation of cold chain infrastructure at the farm level. The component is demand/entrepreneurdriven, for which government assistance in the form of credit linked back-ended subsidy is available at the rate of 35% of the project cost in general areas and at the rate of 50% of the project cost in hilly and scheduled areas.
Debashis Dutta, Director – Logistics and Industrial, JLL: Cold chain is one of the most specialized and essential service requirements for perishable and other temperature sensitive cargo. The need of maintaining temperature and other environmental parameters, such as humidity, for select cargo is to maintain its value and use. In cold chain segment, transportation and storage are the most important sub-segments, which need special focus to maintain controlled environment. Accordingly, COVID-19 changed the supply chain pattern of different commodities within hinterland locations. Cold chain operators have adopted decentralized model of storage to optimize their efficiency. The operators have initiated to expand the storage capacity to cater to their projected peak-demand in metro cities and new destinations for establishing supply chain network in tier-II locations. From commodity perspective, Covid-19 had a positive impact with rising demand of medicines and vaccine delivery, achieving standard quality for storage/handling of consumables, predominantly in frozen food segment, which are distributed through e-commerce/3PL players.
Dr. Anju Bharti, Dep of Management, MBA, Maharaja Agrasen Institute of Technology, Delhi: The lockdowns due to covid-19 pandemic and the other kinds of restrictions imposed everywhere actually forced many businesses to revise their business models and switch to home delivery solutions. There were requirements of variety of household products mainly the edible products. That actually called for effective cold chain logistics solutions (D2C strategy). Along with the edibles and semi-frozen food, the cold chain was also used in the case of specific kind of medicines/vaccines to cater to chemist and the hospitals without spoilage under effective cold chain logistics solutions. There was only need to make awareness of D2C facility provided by the company maintaining the temperature of edibles wherever required. A PCM (Phase Change Material) based solutions has been introduced for temperature control. Research shows that severe disruption through the pandemic is driving enterprises to make their supply chains more resilient, collaborative and networked. The movements of goods from factories to CFAs and from there to distributors were taken care of quite well but most of the last mile delivery was either done in ambient conditions or with unsafe, unsustainable solutions resulting in product spoilage and wastage. There was a great challenge for India to produce vaccines to inoculate every citizen while ensuring delivery of vaccines without any spoilage. This was made possible only using effective cold chain solutions. The pandemic situation led home delivery segment grow at a 65%. The actual cold chain penetration in this market is less than 40% in the food space and is going up with increased awareness of the consumers. According to various research reports, over the next five years, there will be increased focus on vaccine distribution, food processing will show peak, and retail & food delivery markets for perishables will also show increasing trend each year.
EVOLUTION OF COLD CHAIN AND ITS TRANSFORMATION
Vickram Srivastava: With e-pharmacy catching up, this segment is poised for further developments. Blockchain, latest track & trace technology for real-time tracking, and the advent of drone service is just the tip of iceberg, and it is expected to completely transform this sector and in a very eco-friendly sustainable fashion. New developments on cool chain storage and transport technology in terms of portable cool chambers and dark stores with cold chain capabilities are expected to evolve to meet and serve the needs of patients and consumers.
Rajeev Ranjan: There is significant effort to move towards a Green Cold chain, reducing carbon emissions, moving towards carbon neutrality by siting at optimal environment-friendly locations, efficient layouts, building structures with high thermal efficiency, highly efficient refrigeration systems, water savings, use of renewable energy). IT is making inroads to drive
end-to-end visibility from “farm to the point of consumption”;
reduce order to fulfilment lead time. IOT/ sensors help monitor efficiency and shelf life parameters to drive efficiency across the value chain. With a click, one can now get live updates of any temperature abuse across the chain irrespective of geography.
Advent of prefabricated structures for cold chain, advancements to efficient vehicle designs, CNG-based systems, smaller vehicles (for intra-city movement), passive cooling/ Eutectic systems that work on biomass or Solar for precooling and distribution are few other areas.
Rahul Agarwal: Over the years, the need for quality cold chain integrated solutions has been growing. Kool-ex has added warehousing to its portfolio and our first integrated cold chain facility is under construction at Khopoli, which will house 20000 pallets and will cater to the entire spectrum of cold chain users. With our lead position in cold chain trucking & warehousing, we will emerge as one of the largest integrated cold chain solutions providers in the country.
Mihir Mohanta: According to a report, the frozen foods market in India was valued at Rs85.27 billion in 2019 and is expected to reach Rs192.96 billion by 2024, expanding at a CAGR of ~17.74% during the same period. In 2017, the cold storage industry was estimated to be worth Rs952 billion and has been projected to grow up to Rs2,293 billion by 2023. That’s over 120% in just five years. This shouldn’t come as a surprise, considering the rate at which India is growing as an exporter of food products. As per the government report, on Oct 2012, over 6,488 cold stores with a capacity of 30.38 MMT were available. In September 2020, the numbers increased to 8186, and the capacity grew to 37.425 MMT. These are primarily meant for storing perishable horticulture produce like fruit & vegetables. A vast majority of these cold storages are owned by private players.
According to government data, the state-wise distribution of cold storages as of 2020, the north-eastern states noticeably had the lowest number of storage units and capacity. This is because 68% of India’s cold storage capacity is being used for storing potatoes, while 30% is being taken up by other multi-commodity cold storage like meat, seafood, dairy products, fruit & vegetables, and pharmaceuticals. The geography-wise government’s focus today is on northeast states & hilly and scheduled areas. On the type of cold store, multi-commodity stores are being promoted.
Debashis Dutta: India is one the leading country in consumption and production of different environment sensitive cargo including perishable cargo. This is due to the country’s geographical spread, agriculture linked economy and large population size. Historically, the storage and handling of these cargo, which are environment sensitive, stored and handled by local service providers. From 2010 onwards, multiple organized cold chain operators had taken initiatives to capture market attributable to cold chain segment. Though very nominal, these organized players could achieve ~10-15% of the market share in this unorganized and scattered segment till 2020. The Covid-19 scenario escalated to re-visit and re-think the existing supply chain pattern and to frame strategy to capture market share from unorganized service providers of the segment. During last two years, the industry was shifted from more unorganized segment to palletized segment because of rising awareness, quality consciousness and dependency on e-commerce platforms in consumption pattern. All major cold chain operators in India are on their rapid expansion mode and few global players are also exploring suitable opportunity to enter India’s cold chain market. Apart from direct investment by the cold chain operators, other industries such industrial real estate developers, fund-houses, technology players are also exploring synergies to act as catalyst to be partner in this rapid and unexplored investment expansion.
Dr. Anju Bharti: The first cold store in India was reported to have been established in Calcutta in 1892. During 1970s, this sector evolved as multiproduct cold stores, which began in Maharashtra and other states of India. It was mainly used for preserving potatoes initially. Later, in 1990s, it was followed by development in the food processing sector and freezing sector across the country. There was the huge requirement of cold storage. This need led to the shift of cold storage to the concept of cold chain. The motive was to preserve edibles from getting decomposed maintaining the entire food chain from farm to retail. After the globalization during 1990, the introduction of a wide range of sectors had led to favourable growth of the economy in the country. Many companies introduced popularized frozen food varieties such as frozen peas, corn, mixed vegetables, okra, mango pulp, mango slices and dices, etc. This concept was later followed by other private players and this process is still on even in the current scenario. Apart from the above normal frozen food varieties, they also came up with Ready-To-Eat (RTE) products like frozen parathas, samosas, etc., to serve the growing needs of customers.
The recent trends in cold chain industry in India highlight that apart from multiproduct cold stores, new types of cold chain facilities were also introduced such as Controlled Atmosphere (CA) stores, multi-purpose cold stores for storing multiple commodities, pack houses with processing and pre-cooling facility and ripening units. The potential is vast for frozen food production in the country and distribution facilities for the refrigerated foods. Food Distribution Centres (DCs) are designed to provide a variety of services including handling fresh, frozen, and even non-refrigerated foods, both in the veg and non-veg category. Refrigerated transport is an important link in the cold chain and has a great scope for increase in numbers. There is a potential for further development in cold chain management which are as follows:
Reefer vehicles: Existing vehicles – 10,000 nos. Estimated requirement, 61,800 nos. Hence the estimated gap is 51,800 nos.
Ripening chambers: Existing – 900 nos. Estimated requirement – 9,100 nos. Hence, the estimated gap is 8,200 nos.
It is also a matter of experience that some of the existing cold stores are nonfunctional, and many others are based on old and outdated technology. These certainly must be upgraded with the modern technology and this itself is a huge business opportunity.
CHALLENGES FACED AND MANAGED WITH GRIT
Vickram Srivastava: ‘Track and Trace’ has been a pertinent challenge that the cold chain industry has been facing for years. Though the technology has been around for a few years (active RFIDs, active data loggers with real time information transmission) to track and monitor the cold chain integrity end-toend, its large scale adoption has been a challenge due to associated high cost. However, with critical vaccine shipment whose effectiveness and efficacy, both, could be compromised with a broken cold chain, I believe keeping the cost factor aside distributors, suppliers and governments will need to do their best to maintain the cold chain integrity. The real challenge will be maintaining the cold chain in last mile delivery: factoryto-patient cool chain integrity.
Rajeev Ranjan: Our immediate and topmost priority was to ensure the safety of our direct & indirect employees and the safety of our consumers. We encouraged our staff to get vaccinated, financially supported the vaccination cost as well as ran a promotion to encourage our customers to get vaccinated. Additionally, we swiftly implemented the Safety Plus program at all of our restaurants to assure our customers that every step of ur entire “source-make-deliver-service” chain is 100% safe. For the safety of our customers & employees, we started contactless ordering in-store. We also started home delivery right at the beginning of the pandemic. Our Drive thru’s are designed to be fast-convenient and have minimal touchpoints. This was recognized and appreciated well by our esteemed guests. Lockdowns brought huge uncertainty in demand and significant changes in buying behaviour. Accordingly, we activated third-party food delivery to meet our customer’s needs and reduce demand uncertainty led risks.
Rahul Agarwal: The industry which earlier had a fragmented approach is now looking for integrated service providers who can take care of the entire supply chain end to end. There are hardly any known players today who have successfully demonstrated this, in the cold chain segment in India and this throws open a tremendous opportunity for companies looking to provide such services. With our two decades plus experience in supply chain logistics and our lead position in cold chain, we intend to be a market leader in such integrated services.
Mihir Mohanta: During the 1st phase of Covid-19, fresh fruit & vegetables market (mandis) was not under any obligation to shut down, as these were considered essential services. But many of the operating middlemen (Adat), commission agents preferred to stay at home out of fear. Some left their operations to be managed by their Accountants (Munims). Consequently, a completely new market scenario emerged. Most mandis across the country operated at around 50% of their capacity. Some were closed completely. Most cash rich Adat/ Commission agents took the back seat, preferred not to operate during these hard times. The Munims/Mashakhors (small traders) /Petty-Adat whose credibility and credentials were unknown, were at the helm of the operation. The worst of it that the Munims/ Mashakhors /PettyAdat lacked the requisite operational credential to make a legal entry into these mandis, as the authorities’ seeked for credentials for entry. Hence, had troubles at security-checks.
Many of the states decided to shut down the local mandi, weekly bazaars or the rayatu (farmers) bazaars to avoid crowding. Small traders also failed to reach to such places in the want of the public transport. As a result of this, the consumer dependence on organized retail and e-commerce surged up dramatically. Many of these organized players were quick to adopt the sanitization practices and restore their operation fast. Some of them marketed the hygiene features as their offerings to re-assure the customers. Many of the retailers came up with innovative ways to maintain social distance and hygiene. The Agri-tech start-ups took this as an opportunity. As the physical brick & mortar retailing was constrained, their App-based home delivery models grew multifold. Suddenly, a large section of consumers shifted to home delivery. In order to maintain large scale distribution, the concept of “Dark Store” – a temperature-controlled space, got a boost in the supply chain.
Debashis Dutta: Key challenges faced by the cold chain industry was to service peak demand load during Covid period. Due to restricted movement of goods, supply of labour (predominantly which depends on migrant labor), demandsupply mismatch of commodities in different micro markets, supply of vehicles for transportation. Since Indian cold chain industry is currently under manual or semi-mechanized model of loading/ unloading, storage and handling of cargo, the economic disruption due to covid impacted a lot in terms of cargo handling and distribution. Lack of availability of suitable buyer, disruption in manufacturing process, lesser consumptions during Covid impacted the supply chain pattern. However, majority of the cold chain operated with desired local license / permissions for full day operations during complete lockdown period. To operate in this phase, every operator explored additional security and hygiene arrangement in the facility / transport vehicles at a cost of additional operational expenses. In addition, majority had deployed significant efforts to restructure in operation and expansion strategies to cope with restriction and change in supply chain.
Dr. Anju Bharti: This pandemic has caused widespread concern and economic hardship for consumers, businesses, and communities across the globe. It disturbed the whole network of the supply chain and the logistics industry. There was the shortage of available workforce and inadequate supply chain infrastructure during lockdown not only in India but worldwide. The main challenge was to maintain the cold chain till it gets used (Medicine or Vaccines) or consumed in case of edibles, that too in poorer areas where there was no regular supply of electricity. For example, maintaining temperature of Covid vaccine was a challenge as there were no mechanisms to keep vaccines at low temperatures. There are various ways to cope up with the problem and can maintain the temperature for longer period. For example, various kinds of chilled ice /dry ice/ gel packs, etc. are available.
Normally, companies face many problems with cold chain logistics management, such as equipment breakdown; excessive heat exposure; human errors; damaged goods; and higher cost. Many forms of medication and all perishable foods require proper packaging and cold packs for shipping. The need was to find the right combination ensuring that the deliveries do not end up damaged or spoiled when they reach their destination. Warmer weather offers additional challenges when it comes to shipping items that need to stay cool. For smaller edible orders, different types of Ice packs were used by fresh to home, BigBasket, More, etc., for D2C movement during covid. These included easy Ice plastic Reusable flexible chiller; reusable long lasting Freezer ice blocks; dry pack ice substitute; insulated cooler/ chiller ice special box; reusable hot and cold flexible gel packs; reusable ice packs; and refrigerators, which can also run by inverters.
The greatest was challenge faced during logistics of dispensing the vaccine to the vast population, a task that is extraordinarily difficult to accomplish. The Indian administration launched the Electronic Vaccine Intelligence Network, a digital platform to manage its entire vaccine stock, logistics, and cold chain tracking of all the country’s vaccine storage levels. The National Cold Chain and Vaccine Management Resource Centre was set up to monitor the process. Customized refrigerators are being manufactured to meet the demand for Covid-19 vaccine storage locally. These fridges can hold temperatures at 2-8°C for several days in the event of a power outage. There are other types of cold packs which can provide 24 to 36 hrs. of effective cooling that can guarantee that all products arrive fresh and safe to the customers. These are advanced insulated cold packs, such as Re-Freez-R-Brix™ Cold Bricks; Ice-Brix™ Cold Packs; Tech Pack™ Moisture Resistant Cold Packs, etc.
NEW AGE TECHNOLOGICAL INTERVENTIONS REVOLUTIONIZING COLD CHAIN
Vickram Srivastava: Blockchain technology is catching up very fast and one of the early beneficiaries seem to be the logistics sector. It is expected to bring transparency and data accuracy to the sector, especially in the pharma cool chain logistics. Sustainable and carbon neutral initiatives are also expected to catch up along with automated pick and deliver service (AI/ML driven robotics and drones) will be a reality out of a scifi movie in the very near future.
Rajeev Ranjan: To ensure the adoption of digitalization in the cold supply chain and end-to-end visibility, all significant players in this segment are investing heavily in IT systems. This is a value addition for a customer and helps in food safety compliances. The advancement of artificial intelligence (AI) / Machine Learning (ML) systems to predict demand and automation of cold warehouses is a key focus area. Passive cooling systems re also gaining traction in the fruit & vegetables (F&V) segment.
Rahul Agarwal: There is a growing need for integrated technology in the entire supply chain. Additionally, government has mandated the need for QR coding in medicines at the strip level and the order was passed in January 22. This will lead to the emergence of integrating technology platforms, such as Blockchain. The purpose of such platforms will be to securely capture data at every level of supply chain, right from manufacturing to consumption, in real-time. Koolex is working closely on this and is looking to co-develop Blockchain as an industry product, with several interested partners and will announce its foray into Blockchain very soon. Since majority of food & pharma requires cold chain, this will be a very important tool of the future in these segments.
Mihir Mohanta: As the ordering shifted to digital mode, the consumers’ as well the producers’ data is getting captured. Owing to which the science of analytics stared play an enabling role in a big way. Since the consumers were directly interacting in the digital systems, the captured data backed with AI (Artificial Intelligence) started predicting the consumer behavior patterns. Payments to farmers shifted from cash & cheque to DBT (Direct Bank Transfer). The adoption of digital purchases resulted in simplified implementation of traceability systems. The use of barcodes, RFID tags or blockchain technologies gained fast prominence than anticipated. As the labor availability was erratic, there was a greater thrust to use of alternate options like automation & robotics. The pandemic fast forwarded such applications and the intensity of use. However, in fruits & vegetables supply chain, both digital & physital (physical delivery) go hand in hand. Those who were able to synchronize both had a quantum jump in their turnover.
Debashis Dutta: Cold chain industry is known as high Capex and Opex model of development and operation globally. As a result, the industry grew in scattered and unorganized pattern. In India, majority of cold space requirement is serviced by conventional cold storage space (85- 90%), which do not follow the desired standard and protocols for storage and handling to optimize cost to cargo owners. Additionally, majority of reefer vehicles are designed without following desired standards for transporting palletised cargo. In this context, technology plays a suitable role to optimize cost through increase in efficiency. For storage destinations, probable technological interventions could be in identification of scale of development, racking pattern, automated material handling system, docking positions, inventory management system, etc. However, interventions of technology in cold storage space are capex sensitive components. Use of technology has impact of the capex directly. As a result, planning of use of technology at the time of design is very important to optimize capex.
On the other side, there is severe need for inclusion of modern technology in reefer vehicle design in global standards. Efficient design in reefer vehicle not only optimizes carrying capacity of the vehicle but also minimizes risk of disruption/ damages due to mechanical fault during its journey. Use of desired MHE helps to optimize cost of operation, use of renewable energy optimizes cost power, automated inventory management system helps efficient in-box handling system, GPS-driven cargo monitoring system provides real-time monitoring. However, the initial capex for these modern technologies shall only be viable when a desired level of cargo is achieved in operation.
Dr. Anju Bharti: The technology for construction and operation of cold chain projects has undergone a lot of change over the past few years. In construction of cold chain facilities, PEB structures are now replacing conventional construction practices. Pre-engineered steel buildings (PEBs) are those which are fully fabricated in the factory after designing, shipped to site in CKD (completely knocked down) condition. Use of eco-friendly materials in construction is increasing. Insulated panels technology has largely replaced the old and conventional insulation practice. Sandwich insulation panels ensure highly thermal insulation properties and high structural strength and are being used for cold stores as well as process halls. Manual or mechanized insulated doors for cold rooms and docks ensure least energy loss and effective temperature control. Use of eco-friendly refrigerants is now being promoted and practiced taking care of the environmental challenges. Refrigeration machinery and systems are now designed with high energy efficiency for optimal use of power; thus, reducing operational costs and ensuring minimal water consumption.
As a latest development, Low Charge Ammonia systems are being developed and employed in the cold chain sector and the latest is addition of Ammonia DX systems, which have much smaller refrigerant charge and can have fully automatic operation like the HFC plants. Cold chain operations are getting more and more automated with state-of-theart control systems. Capacity controls are used with compressors for energy savings. Energy efficient equipment are being used in electrical systems. These include IE2 or IE3 electric motors, LED lighting, alarm systems, PLC systems, APFC panels and Solar PV panels. Use of renewable energy like solar, wind and other sources are finding their place in cold chain. Innovative products like solar roofs, energy generating systems with use of biogas and cow-dung cakes, etc., are being introduced in the market. The use of solar PV is getting popular, especially where net-metering is available. In material handling and storage systems, various modern storage systems are being implemented like racks for manual loading and unloading operation, racks with reach trucks, forklifts, BOPTs, etc. Software for e-tendering, cold storage management, cold logistics management, IoT sensors and tracking in reefer transport, mobile monitoring of remote operations, etc., are becomingincreasingly popular. The upcoming trends that need to be fully embraced by companies are- RFIDs, Wireless sensor networks (WSN) and Internet of Things (IoT); Time-temperature indicators (TTI), etc.
WSN is a combination of sensors, microcontrollers, and RF handsets. These components communicate with each other at a local location. A wide range of WSN is connected through the Internet to act as sensory organs for IoT. IoT is an ideal platform for remotely monitoring and controlling the real-time status of perishable goods across the cold chain to enable the First expiry first-out (FEFO) system. TTIs are simple and inexpensive devices, which indicate the timetemperature history of the products they are applied on. These indicators can be configured on user portals, devices, and vehicles as per your requirements. TTIs can be specially modulated to indicate and correlate a specific food product safety and quality status at any point in the supply chain, thus providing an effective decision tool.
In adopting the latest monitoring, control mechanisms, and automation in data capturing, the Indian cold chain sector has a long way to go. The key to such transformation is to localize the technologies to suit the scale of Indian industries and by creating flexibility in the system to accommodate and modify the elements of complex supply chains.
BUSINESS-FRIENDLY POLICIES – NEED OF THE HOUR
Vickram Srivastava: The government is already helping set up logistics corridors and parks around the country and develop key ports (air and sea) to handle cool/cold chain shipments. More incentives and PLI schemes can provide another boost to this developing sector.
Rajeev Ranjan: According to estimates, in our country, ~30% of fresh produce (F&V) is wasted before reaching the consumers on account of post-harvest losses because farmers do not have access to cold chains. Setting up an efficient cold chain is capex intensive and requires government support in providing better avenues of funding and sharing through public and private partnerships. Currently, most of the cold storage facilities are constructed near cities. To support their adoption in the rural areas and help farmers, land usage guidelines (agriculture to commercial usage) need to be more efficient. Additionally, it would be ideal for incentivizing the usage of passive (Eutectic) cold chains to promote green supply chains. These cold chains can be cost-effective and installed closer to farms. In addition to the cold chain, supporting SMEs in rapidly increasing fruit & vegetables processing capacities at right locations will help minimize F&V wastage, reduce percentage of costs incurred through cold chain in the total value chain. This will bring muchneeded quality jobs in the rural economy and build capability to serve consumers (including export) looking for nutritious seasonal products around the year.
Rahul Agarwal: The government selectively offers subsidy on agriwarehousing, and this should be opened to all cold warehousing facilities, sector agnostic. Taxes on cold chain equipment, be it trucks, cold rooms, chemicals, panels, etc., need to be relooked at as this sector needs every possible incentive to grow.
Mihir Mohanta: Farm laws had allowed free flow of agriculture produce across states. With the repeal of the three acts, many of the states reactivated old practices. This hinders the free-flow of goods. Similarly, many states re-imposed APMC taxes. As a result of this, there are restrictions on free-flow of goods across the border. The government needs to find ways to address this issue. Ministry of Food Processing Industries is implementing the Scheme for Integrated Cold Chain and Value Addition Infrastructure as one of the components of Pradhan Mantri Kisan Sampada Yojana (PMKSY) with the objective of reducing post-harvest losses of horticulture & non-horticulture produce and providing remunerative price to farmers for their produce. Under the scheme, the Ministry provides financial assistance in the form of grant-in-aid at the rate 35% for general areas and 50% for Northeast states, Himalayan states, ITDP areas and Islands for storage and transport infrastructure and at the rate of 50% and 75% respectively for value addition and processing infrastructure subject to a maximum of Rs10 crore per project for setting up Integrated Cold Chain projects including Irradiation facility. Standalone cold storages are not covered under the Scheme.
Debashis Dutta: Ministry of Food Processing Industries, Government of India, had published a detailed policy in the year 2008 for cold chain sector. The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. However, this policy needs significant change and amendment focusing large scale development in this sector. Apart from the cold chain specific policy interventions, couple of general policy interventions would have positive impact on future demand of cold chain segment. Some of these are:
Make In India / PLI Scheme to procure global technology and innovation in manufacturing of equipment and installations
Encouraging local produces in global marketing through innovative model of marketing
Revamping SEZ platform to attract global manufacturers to capture need of Indian market
Encouraging integrated logistics infrastructure development in different parts of the country
India Rail plan to encourage multimodal logistics operation, etc.
However, policy document cannot resolve the inherent disadvantage in Indian cold chain segment. The actual need of this segment is to bring long term fund for setting up cold storage infrastructure; knowledge and knowhow on global operation to achieve maximum efficiency and enforcement of policy restriction on storage and movement of temperature sensitive cargo.
Dr. Anju Bharti: Ministry of Food Processing Industries (MOFPI) provides financial assistance (grant-in-aid) to the tune of 50% the total cost of plant and machinery and technical civil works in general areas and 75% for NE regionincluding Sikkim and difficult areas (J&K, Himachal Pradesh, and Uttarakhand) subject to a maximum of Rs10 crore. Further to increase investments and promote entrepreneurship and growth in this sector, the government is offering financial incentives. Throughout the country, states are offering various incentives for smooth setting up of infrastructure to deal with Covid-19 and are now paying attention to cold storage as a vital element in the battle. The cold chain storage set up in Gujarat is of tremendous significance in India’s vaccine diplomacy and its strategic location provides impetus for the nation to link healthcare infrastructure and renewable energy, and further provide space for setting up of more chains in neighboring states like Rajasthan and coastal states like Goa where storage units can function in a cost effective and environment friendly manner while eyeing a 20% CAGR by 2025.
FUTURE EXPANSE OF COLD CHAIN INFRASTRUCTURE
Vickram Srivastava: The logistics market in India is expected to grow at a CAGR of 10+% over the next 5 years. With the infrastructure creation happening at the same pace and investments from both government and private players, we do not foresee a major challenge in terms of capacity to meet the pharma supply chain demand. In fact, storage at ports and logistics infrastructure (air/road) to handle in-transit movement, is available and capable of handling the load surge. The real challenge, in my mind, will be last mile connectivity to far-flung locations across the wide geography of the country and how we are going to ensure cold chain integrity of the drugs and vaccine before it is finally administered to the patient. The efficacy and effectiveness of the drug must be ensured by having cold chain integrity across the value chain of the drug supply: factory-to-patient cold chain management.
Rajeev Ranjan: India has a massive shortfall in cold chain capacity considering our geography and diversity of crop patterns. During the early years, cold chain infrastructure was established in a discreet manner. However, the government’s push for an integrated approach has started bearing fruits. The cold chain segment is expected to grow at a CAGR rate of ~22-23% until 2025 across India, focusing specifically on the pharma and F&B sectors. With convenience and health playing a critical factor in the consumers’ decision-making process, we are witnessing an increase in the investment in mobility. Additionally, movement by temperature control rail racks has been gradually picking pace for cross country movement of frozen food and F&V. With startups venturing into this domain, we expect the packhouses to move closer to farms and farmers getting better realization of their crops. Lastly, with food safety and compliance gaining momentum and an increase in consumer consciousness about food ingredients, we hope to see an increased momentum on the digitalization of the supply chain.
Rahul Agarwal: The demand for cold chain services is growing rapidly and there is tremendous opportunity for organized players to take strategic positioning. As per estimates, India needs at least half a million ton of additional cold storage capacity and another I lakh reefer trucks to plug the current gap, while demand continues to grow. Consumption in India is amongst the highest in the world and the need for such infrastructure will be directly proportional to the growing demand in consumption.
Mihir Mohanta: There needs to be a shift in focus towards end-to-end cold chain and not just storage. There should be emphasis on modernization of existing stores with better and more sophisticated machinery and equipment. As we move ahead, we will witness setting up of multipurpose cold storages as against conventional single commodity storage. There will be tremendous growth in modern pack-houses, ripening Facilities, CA storage, reefers, IQF, farm-gate or source point cold storage. Companies will move towards deploying energy efficient technologies and new storage technologies. Alongside, integrated cargo complexes are being planned at major airports in India, which will be equipped to handle all kinds of goods, including perishables.
Debashis Dutta: Indian cold chain industry is currently passing through transformation phase. The transformation is happening in different areas related to cold chain segment. Palletized cold storage is developing rather than conventional cold space. There were several instances observed to conversion of conventional cold storage into palletized format in different micro markets. There is a greater awareness on procurement and consumption of cargo quality having environment sensitive impact. Industrial real estate developers and fund houses explore cold chain segment as one of their investment platforms. Knowledge and efficient investor/ developer/ operators go beyond their local status to diverse geography to create business synergies. Leaders in panIndia cold chain market are exploring the market with improvised supply chain model, various value-added services and efficient handling/ monitoring systems. However, key deficiency in this segment is enforcement of regulatory compulsion onto the cold chain operators to maintain temperature and other environmental pre-requisites between production point to consumption point and impose restrictions on marketability of any product having damage due to quality deterioration and non-maintenance of cold chain.
Dr. Anju Bharti: The cold chain industry in India is still at a nascent stage, which makes it one of the promising fields in the warehousing and logistics industry. Though there is industrial shift towards a more integrated cold chain network and adequate cold storage facilities, the industry is still reeling under a deficient cold chain infrastructure. Without the preconditioning centers, the produce cannot be readied for the cold chain, and without transport, there are breaches in integrating the movement across the cold chain. Thus, large investments need to flow into rural India and the focus should be to develop and create new packhouses with associated transport capacity at the village level.